3 Tech Stocks Beating Nvidia This Year That Still Look Cheap

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The great Nvidia (NASDAQ:NVDA) has had a rather lukewarm year, rising just north of 31% while comfortably topping the Nasdaq 100, which is up close to 20%. I’m sure NVDA shareholders aren’t complaining about the market-beating gains on a year-to-date basis. Still, the big question is whether a new wave of AI demand could help propel next-generation GPU sales through the roof again.

Indeed, the hyperscalers are probably going to keep buying GPUs hand over fist. But with the rise of custom silicon solutions and the potential for AI spending to backtrack a bit (Meta Platforms (NASDAQ:META) did recently cut 600 jobs from its AI division, which might not give AI traders all too good a taste in their mouths as to where spending might go next), there are some risks that could weigh more heavily on the likes of an Nvidia versus the rest of the Magnificent Seven that have more of an earnings cushion to bounce off of should AI have another year of efficiency, so to speak.

Either way, the AI race is just that: a race.

AI is powering big gainers beyond just Nvidia

With AI researchers going full speed ahead with the fear that rivals could catch up and America’s lead withers away, there’s little reason to believe that the AI trade will end in some sort of bubble-bursting scenario. Indeed, it feels like an AI bubble, and its imminent burst is now the consensus view on Wall Street.

And while there is also no shortage of bulls that believe AI can continue unlocking next-level productivity (and perhaps soon profitability) gains, investors may wish to stick with AI stocks, but be a tad more picky about the price they pay and the downside risks they entail should a fantastic quarter no longer be able to cut it against what now feels like some very lofty analyst expectations.

As we found out in Monday’s session, even a strong number can inspire selling. And that’s the danger of chasing the shares of AI firms that can’t be stopped. Even if the firms themselves are going full speed ahead, there’s no guarantee their shares will, especially if analysts err on the side of excessive optimism when it comes to their valuation models on high-growth AI companies.

Personally, I think expectations have now caught up with Nvidia and that could make it harder for the AI titan to keep beating the market in the next three to five years, even if AI continues moving at blistering speed.

In this piece, we’ll look at three AI companies that are outperforming Nvidia year-to-date, with valuations that make more sense and the potential for less downside should an AI correction finally unfold.

Micron

What a year it’s been for the memory chip maker Micron (NASDAQ:MU), which is up 137% year to date. With a still-attractive 27.2 times trailing price-to-earnings (P/E), I view the AI beneficiary as still having legs to run higher as it cashes in on the AI data center boom.

Citi analyst Christopher Danely thinks DRAM (dynamic random access memory) could be the next source of strength. Indeed, you can’t have high-performing data centers and AI without high-performance memory. And until AI demand cools, the path of least resistance for Micron appears to be higher.

Lam Research

Lam Research (NASDAQ:LRCX) is another 2025 outperformer that’s starting to get noticed again. Now up 103% year to date, the semi equipment maker is finally starting to feel the AI wave. Still, some analysts think the full force of the wave has yet to power it higher.

With robust AI momentum and a wave of analyst price target hikes now in the books, I wouldn’t give up on Lam just yet. With Deutsche Bank analyst Melissa Werathers calling for “cyclical and structural tailwinds,” I wouldn’t dare bet against Lam stock as it looks to make higher highs.

Intel

Like Micron and Lam, Intel (NASDAQ:INTC) is making up for lost time, with 89% in gains year to date, thanks in part to investments from the U.S. as well as other firms. With the confidence of its peers and the government, it’s hard to be bearish on the name as it aims to catch up in the AI race.

Next year, the firm will look to launch a new AI data center chip named Crescent Island, which could help it close the gap with its rivals. Either way, I like Intel’s chances of continuing to beat Nvidia in 2026 now that it’s getting some much-needed help and capital.

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